More states see high jobless rates

A growing number of states suffered double-digit unemployment rates in January, and others are close behind, buttressing fears that the national jobless rate could hit 10 percent by year's end.

The rising joblessness reflects the pain that the housing, credit and financial crises — the worst since the 1930s — has caused workers and companies. The latest figures were issued Wednesday in the Labor Department's monthly report on state unemployment.

"There is hardly any escape from this recession," said Steven Cochrane, managing director of Moody's Economy.com. "With state unemployment rates rising so quickly, it reinforces the notion of a 10 percent national unemployment by the end of the year."

In January, jobless rates rose in 49 states and the District of Columbia. Louisiana was the only state to record a drop.

About 5.1 million people are drawing state unemployment insurance, near an all-time high, the federal government said last week. The crush has exhausted unemployment funds in New York, California and elsewhere, forcing them to tap the federal government for money to keep paying benefits.

Joblessness was worst in the West and Midwest, where the loss of manufacturing, construction, retail and other jobs tied to the collapsed housing market was especially severe.

The West — home to California and some other states that led the housing boom — has been battered by the housing bust. And jobs are vanishing from the Midwest as the troubles of Detroit's beleaguered auto makers spill over and reduce employment in industries linked to autos, such as car parts and other components used in production.

Frank Aguilar, who lives in New Jersey, is among those swept up in the collapse of the U.S. auto industry. After six years at Chrysler, he was laid off about a month ago from his job as a dealer representative in the tri-state area.

"I'm looking for anything right now," Aguilar said. "I'm antsy."

The jobless rate in Aguilar's home state rose to 7.3 percent in January, from 6.8 percent in December.

Laid-off textile, clothing and other factory workers in South Carolina are hard-pressed to find work elsewhere. In Rhode Island, state leaders are still seeking a high-tech replacement for the long-ailing manufacturing sector.

In December, only Michigan had a double-digit jobless rate. One month later, four states did.

Nick Davies is job hunting in South Carolina.

"I'll take anything you've got," the 47-year-old engineer told a recruiter. He moved to Myrtle Beach from Peoria, Ill., after being laid off from Caterpillar three months ago, figuring the job market had to be better in the sunny South. Now, he's not so sure.

Across the country, David Rhey, a 28-year-old father of three, worries about losing his job with the city of Sacramento, Calif., which is preparing layoffs.

"We're all just hanging on until we can find something else," said Rhey, a seasonal parks employee. He runs his own tree-trimming business on the weekends and frets about being able to afford his living expenses if he loses his city job.

The unemployment rate in California jumped to 10.1 percent in January, from 8.7 percent in December.

Michigan's rate hit 11.6 percent in January, the highest in the country. Second-highest was South Carolina at 10.4 percent. Rhode Island was next at 10.3 percent, which marked an all-time high for the state in federal records dating to 1976. California rounded out the top four.

North Carolina and Oregon, along with South Carolina, notched the sharpest monthly gains: 1.6 percentage-points each. North Carolina's rate soared to 9.7 percent, Oregon's to 9.9 percent.

Four other states — Indiana, Nevada, North Carolina and Oregon — plus the District of Columbia had rates that topped 9 percent in January.

Wyoming continued to register the lowest unemployment rate: 3.7 percent. And Louisiana's unemployment rate fell to 5.1 percent in January, from 5.5 percent in December.

The U.S. unemployment rate, released last week, rose to 8.1 percent in February, the highest in more than 25 years. Some economists predict the U.S. jobless rate will peak at 11 percent or higher by the middle of 2010.

Nationwide, besides laying off workers, employers are holding hours down and freezing or cutting pay as the recession eats into sales and profits.

Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to shrink their work forces. The result has been a vicious cycle in which the economy's problems have been feeding on each other and accelerating the downward spiral.

And more layoffs are on the way. National Semiconductor Corp. said Wednesday it will lay off 1,725 employees, more than one-quarter of its work force, after third-quarter profits fell 71 percent.

Industrial conglomerate United Technologies Corp., which makes Otis elevators and Sikorsky helicopters, said Tuesday it will lay off 11,600 workers, or 5 percent of its work force. Dow Chemical Co. on Monday said it would cut 3,500 jobs at chemical company Rohm & Haas Co. as part of its $15 billion buyout of the company.

President Barack Obama has said it will take time for his economic revival and job-creation programs to work.

Obama is counting on a multipronged assault to lift the country out of recession: a $787 billion stimulus package, including money that will flow to states for public works projects, provide aid to states to defray budget cuts and extend unemployment benefits and boosts food stamp benefits; a revamped bailout program for troubled banks; and a $75 billion effort to stem home foreclosures.

The recession has claimed a net total of 4.4 million jobs since December 2007. It's left 12.5 million people seeking work — more than the population of Pennsylvania.

Associated Press Writers Jeffrey Collins in Myrtle Beach, Don Thompson in Sacramento and Tali Arbel in New York contributed to this report.